Friday, November 03, 2006

Every Credit and Debit Card Receipt Should Include Interchange Charge (

[originally posted on Jan 23, 2006. It took nine months for Visa and MasterCard to respond by posting interchange fees on their websites, now can they take the next few days and add the exact rates to every debit and credit card receipt? To liberally paraphrase Oliver Wendell Holmes Jr. who said, “a page of history is worth a volume of logic,” posting the exact interchange fee on all charge receipts is worth a volume of confusing fee schedules cloaked within dozens of website pages. The below original commentary was from last January].

There should be complete disclosure of each total merchant interchange fee as a separate line item on every consumer charge receipt. This crystal-clear posting of the exact interchange charge (in dollars and as a percent of the total sale) is being recommended by - The Credit Card Interchange Report.

While merchants insist the nearly one-hundred separate, bank-imposed, interchange fees are a hidden tax on consumers, Visa and MasterCard explain otherwise. This simple and immediate resolution to this argument that it is a hidden tax is to show consumers exactly what they paid to the banks from each purchase when they use their credit and debit cards.

Until the interchange litigation is resolved, - The Credit Card Interchange Report is recommending that the credit card companies voluntarily disclosure and make transparent the actual, total interchange fee and percent of the total transaction charged for each purchase. This dollar amount and percent figure should be clearly imprinted on all electronic credit card receipts.

This single line item on every electronic credit and debit card receipt should be identified as the "bank processing fee" to create a more transparent understanding of interchange fees. Unlike all other costs-of-goods-sold, this single charge is the one that results from horizontal price-fixing where merchants have little or no ability to negotiate. These postings on every receipt will enable merchants to understand exactly how much is paid to process each transaction. And, candidly it will also enrage consumers too, who are unfamiliar with this charge. Posting the interchange fee on every receipt will swiftly prove the growing argument that these illegal, price-fixing fees and its annual $25 billion burden is a "hidden tax on consumers." Just as sales tax is identified as a separate line item, this too will spark greater consumer awareness and better disclosure these interchange fees.

How about it Visa® and MasterCard®?